Chapter 2: Accounting Concepts and

Principles (FAR by: Millan)

 Chapter 2
Accounting Concepts and Principles

Learning Objectives
1. Explain the varied accounting concepts and
principles.
2. Solve exercises on accounting principles as
applied in various cases.

Chapter 2: Accounting Concepts and

Principles (FAR by: Millan)
 Basic Accounting Concepts
1. Separate entity concept 7. Time Period
2. Historical cost concept 8. Stable monetary unit
3. Going concern assumption 9. Materiality concept
4. Matching 10. Cost-benefit
5. Accrual Basis 11. Full disclosure principle
6. Prudence (or Conservatism) 12. Consistency concept

Chapter 2: Accounting Concepts and Principles (FAR by: Millan)

Philippine Financial Reporting Standards (PFRSs)

The PFRSs are Standards and Interpretations

adopted by the FRSC. They consist of the
following:
1. Philippine Financial Reporting Standards
(PFRSs);
2. Philippine Accounting Standards (PASs);
and
3. Interpretations
Chapter 2: Accounting Concepts and Principles (FAR by: Millan)
 Qualitative Characteristics
I. Fundamental Qualitative Characteristics
i. Relevance (Predictive Value, Confirmatory Value, Materiality)
ii. Faithful Representation (Completeness, Neutrality,
Free from error)

II. Enhancing Qualitative Characteristics

i. Comparability
ii. Verifiability
iii. Timeliness
iv. Understandability
Chapter 2: Accounting Concepts and Principles (FAR by: Millan)
END

Chapter 2: Accounting Concepts and

Principles (FAR by: Millan)